Indian shares fall as government raises tax on capital gains, derivatives trading
Updates at 12:31 p.m. IST
By Bharath Rajeswaran and Manvi Pant
BENGALURU, July 23 (Reuters) -Indian shares declined on Tuesday after the government proposed to raise the tax on capital gains and on trading derivatives, which analysts said could hit the markets in the short-term.
The NSE Nifty 50 .NSEI and S&P BSE Sensex .BSESN dropped about 1.6% each, as of 12:31 p.m. IST.
The Indian government raised the tax rate for equity investments held for less than one year to 20% from 15% and for shares held for more than 12 months to 12.5% from 10%, Finance Minister Nirmala Sitharaman said in her budget speech on Tuesday.
Sitharaman also raised the securities transaction tax on derivatives.
"The market was not anticipating negative surprises in areas like capital gains tax and securities transaction tax," said Krishna Appala, senior research analyst at CapitalMind Research.
($1 = 83.6350 Indian rupees)
Reporting by Bharath Rajeswaran and Manvi Pant in Bengaluru; Editing by Savio D'Souza and Mrigank Dhaniwala
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